Correlation Between Energisa and Fundo Investec
Can any of the company-specific risk be diversified away by investing in both Energisa and Fundo Investec at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Energisa and Fundo Investec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Fundo Investec IMB, you can compare the effects of market volatilities on Energisa and Fundo Investec and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Energisa with a short position of Fundo Investec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Fundo Investec.
Diversification Opportunities for Energisa and Fundo Investec
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energisa and Fundo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Fundo Investec IMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo Investec IMB and Energisa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Energisa SA are associated (or correlated) with Fundo Investec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo Investec IMB has no effect on the direction of Energisa i.e., Energisa and Fundo Investec go up and down completely randomly.
Pair Corralation between Energisa and Fundo Investec
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Fundo Investec. In addition to that, Energisa is 1.14 times more volatile than Fundo Investec IMB. It trades about -0.22 of its total potential returns per unit of risk. Fundo Investec IMB is currently generating about -0.19 per unit of volatility. If you would invest 5,699 in Fundo Investec IMB on September 4, 2024 and sell it today you would lose (330.00) from holding Fundo Investec IMB or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Energisa SA vs. Fundo Investec IMB
Performance |
| Timeline |
| Energisa SA |
| Fundo Investec IMB |
Energisa and Fundo Investec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Fundo Investec
The main advantage of trading using opposite Energisa and Fundo Investec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Fundo Investec can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fundo Investec will offset losses from the drop in Fundo Investec's long position.| Energisa vs. Transmissora Aliana de | Energisa vs. CTEEP Companhia | Energisa vs. Companhia Paranaense de | Energisa vs. Companhia Energtica de |
| Fundo Investec vs. Fundo De Investimentos | Fundo Investec vs. Fundo Invest Imobiliario | Fundo Investec vs. Fundo de Investimento | Fundo Investec vs. Fundo De Investimento |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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